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Complete ALL requirements and ROUND ALL AMOUNTS TO NEAREST DOLLAR

Complete ALL requirements and ROUND ALL AMOUNTS TO NEAREST DOLLAR

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Complete ALL requirements and ROUND ALL AMOUNTS TO NEAREST DOLLAR

Lee Werner is general manager of Stoneybrook Salons. During 2024, Werner worked for the company all year at a $12,900 monthly salary. He also earned a year-end bonus equal to 20% of his annual salary. Werner's federal income tax withheld during 2024 was $4,128 per month, plus $6,811 on his bonus check. State income tax withheld came to $120 per month, plus $80 on the bonus. FICA tax was withheld on the annual earnings. Werner authorized the following payroll deductions: Charity Fund contribution of 4% of total earnings and life insurance of $50 per month. Withholding deductions: Federal income tax Salary Bonus Gross Pay Now compute Werner's payroll deductions and net pay for the year. (Round all amounts to the nearest dollar.) Net pay: Gross pay State income tax Employee OASDI tax Employee Medicare tax Charity fund contribution Life insurance Total withholdings Employer Payroll Taxes: S Total Employer Payroll Tax Total Payroll Expense 154,800 30,960 185,760 S $ 56,347 1,520 8,240 2,694 7,430 600 Net (take-home) pay Requirement 2. Compute Stoneybrook's total 2024 payroll tax expense for Werner. (Round all amounts to the nearest dolla $ 185,760 76,831 $ 108,929 C More info For all payroll calculations, use the following tax rates and round amounts to the nearest cent: Employee: Employer: Stoneybrook incurred payroll tax expense on Werner for FICA tax. The company also paid state unemployment tax and federal unemployment tax. i (Click the icon to view payroll tax rate information.) OASDI: 6.2% on first $132,900 earned; Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000. OASDI: 6.2% on first $132,900 earned; Medicare: 1.45%; FUTA: 0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned. Requirements Print Done 1. Compute Werner's gross pay, payroll deductions, and net pay for the full year 2024. Round all amounts to the nearest dollar. 2. Compute Stoneybrook's total 2024 payroll tax expense for Werner. 3. Make the journal entry to record Stoneybrook's expense for Werner's total earnings for the year, his payroll deductions, and net pay. Debit Salaries Expense and Bonus Expense as appropriate. Credit liability accounts for the payroll deductions and Cash for net pay. An explanation is not required. 4. Make the journal entry to record the accrual of Stoneybrook's payroll tax expense for Werner's total earnings. 5. Make the journal entry for the payment of the payroll withholdings and taxes. - X X
Transcribed Image Text:Lee Werner is general manager of Stoneybrook Salons. During 2024, Werner worked for the company all year at a $12,900 monthly salary. He also earned a year-end bonus equal to 20% of his annual salary. Werner's federal income tax withheld during 2024 was $4,128 per month, plus $6,811 on his bonus check. State income tax withheld came to $120 per month, plus $80 on the bonus. FICA tax was withheld on the annual earnings. Werner authorized the following payroll deductions: Charity Fund contribution of 4% of total earnings and life insurance of $50 per month. Withholding deductions: Federal income tax Salary Bonus Gross Pay Now compute Werner's payroll deductions and net pay for the year. (Round all amounts to the nearest dollar.) Net pay: Gross pay State income tax Employee OASDI tax Employee Medicare tax Charity fund contribution Life insurance Total withholdings Employer Payroll Taxes: S Total Employer Payroll Tax Total Payroll Expense 154,800 30,960 185,760 S $ 56,347 1,520 8,240 2,694 7,430 600 Net (take-home) pay Requirement 2. Compute Stoneybrook's total 2024 payroll tax expense for Werner. (Round all amounts to the nearest dolla $ 185,760 76,831 $ 108,929 C More info For all payroll calculations, use the following tax rates and round amounts to the nearest cent: Employee: Employer: Stoneybrook incurred payroll tax expense on Werner for FICA tax. The company also paid state unemployment tax and federal unemployment tax. i (Click the icon to view payroll tax rate information.) OASDI: 6.2% on first $132,900 earned; Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000. OASDI: 6.2% on first $132,900 earned; Medicare: 1.45%; FUTA: 0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned. Requirements Print Done 1. Compute Werner's gross pay, payroll deductions, and net pay for the full year 2024. Round all amounts to the nearest dollar. 2. Compute Stoneybrook's total 2024 payroll tax expense for Werner. 3. Make the journal entry to record Stoneybrook's expense for Werner's total earnings for the year, his payroll deductions, and net pay. Debit Salaries Expense and Bonus Expense as appropriate. Credit liability accounts for the payroll deductions and Cash for net pay. An explanation is not required. 4. Make the journal entry to record the accrual of Stoneybrook's payroll tax expense for Werner's total earnings. 5. Make the journal entry for the payment of the payroll withholdings and taxes. - X X
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